A probe is being launched into UK petrol prices just as explosive evidence of oil price fixing on a global scale came to light from a whistleblowing trader.

Oil companies in the UK face a possible official investigation into the manipulation of prices after the Office of Fair Trading (OFT) agreed to a 'call for evidence' today from the industry, motoring groups and consumer bodies.

While not yet a
full-scale investigation, it will study
whether reductions in the price of crude oil are being fairly passed on to motorists, who have seen petrol prices remain stubbornly high.

It will explore a number of claims about how the road fuels sector is functioning, including whether supermarkets and major oil companies are making it more difficult for independent retailers to compete.

Whistleblower statement: 'Every day the price is manipulated'

Claire Hart, of the OFT, said: 'We
are keenly aware of continuing widespread concern about the pump price
of petrol and diesel and we have heard a number of different claims
about how the market is operating.'

UK motorists have seen petrol prices
rise by 38 per cent in the last five years, while diesel prices rose 43
per cent. The UK retail road fuels sector is estimated to be worth
around £32billion.

The OFT will publish its findings in
January, and has sanctions available to it such as imposing legal requirements on businesses to change their practices and behaviour, or imposing fines. It may also decide
to refer the matter to the Competition Commission, which has greater
powers.

The decision comes as a whistleblower who trades UK oil futures claimed to one campaign group that oil prices are fixed as a matter of course.

Published on the website PetrolPromise.com, but staying anonymous to protect his
identity, his job and his family, the trader said: ‘I trade the oil market on a
daily basis, and every day the price is manipulated - not just the daily
benchmark price but the calendar spreads that make up a large part of
the daily volume.

‘One part of the problem is a lack of
market transparency. In the oil futures market, huge volumes are offered
and then withdrawn without trading - and unlike stocks and shares where
large holdings have to be declared, in the oil market nobody knows
where the money is coming from and who is ultimately profiting as a
result.

‘For example, large oil futures
volumes are often placed on a bid, and then instantly withdrawn and a
reverse offer is placed. There is no reason for this behaviour other than
to distort market prices.’

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This will now be presented to
Parliament on 13 September 2012, when MPs will have a half-day debate in
the main chamber, calling for a formal investigation.

Conservative MP Robert Halfon, who runs PetrolPromise.com and has compiled a dossier of evidence to show how oil barons are ripping off motorists in an echo of the Libor interest rate scandal, hailed the OFT's decision.

UNLEADED PRICES UP ALMOST 7P A LITRE IN TWO MONTHS

Petrol and diesel pump prices across the UK have risen drastically since July, as the price of oil has rocketed since a summer low of $90 a barrel.

Oil prices now sit at $114 a barrel and as a result, UK motorists have seen a knock-on impact at the forecourt.

Back in mid-July, the price of unleaded was 132.2p per litre, according to the AA – this increased to 135.5p exactly one month later, while petrolprices.com now has the average price of a litre of unleaded at 138.99p.

At the same time, diesel prices have soared. In mid-July, according to AA statistics, the price was 137p per litre and was up to 140.4p in mid-August. Today, the price is 143.52p a litre, according to petrolprices.com.

As a result, both diesel and petrol prices are now closing in on the highs seen in April 2012, when the threat of tanker boycotts sent ripples of panic through the industry.

During the ‘summer low’ at the beginning of July, petrol cost 130.8p a litre and diesel 136.12p.

He said: 'We have to look at the oil market - pump-prices keep going up and up, even though there is no oil-shortage. Why?

'There have been serious accusations
of fraud and market-manipulation. We need a proper investigation, just
as Germany and America are doing. Britain is being taken for a very
expensive ride.'

He said 'rip-off' petrol prices are
keeping people on benefits because they can’t afford to travel and
literally driving people out of work.

'In my hometown of Harlow, the
question is not can you afford to have a car - but can you afford not
to. That’s why we need a tough investigation into the oil market and
allegations of price-fixing.'

Quentin Willson, of FairFuelUK, says, 'There is a widespread feeling that when oil goes up, pump prices rocket immediately – but when the oil prices falls, pump prices don’t reflect that call. This causes a sense of complete exasperation and anger.

'FairFuelUK has been calling for this investigation into the road fuel market for months. Anything that brings transparency and openness to a £32billion market that's always been shrouded in mystery, will be good for consumers, businesses and the UK economy. We want full disclosure to make sure pump prices in this country are fair, reasonable and, most importantly, go down quickly when the price of crude falls.'

Mr Halfon's website, PetrolPromise.com, has
posted a campaign video today explaining how he believes oil companies
are price-fixing and keeping petrol prices high at the pumps.

The price motorists pay for fuel at
the forecourts is determined by retailers who use oil price 'benchmarks'
to decide how much to pay for future supplies. This price is calculated by two main
price reporting agencies - Platts and Argus - on data which is collected
from firms which trade oil on a daily basis, like banks, hedge funds
and energy companies.

But like Libor - the interest rate
measure that Barclays was earlier this month found to have rigged - the
market is not regulated. Instead it relies on the honesty of firms to
submit accurate data.

This may have led to drivers paying
over the odds to fill their tank, as petrol retailers buy their products
based on the prices reported by the agencies.

Mr Halfon is one of 100 MPs
campaigning for lower petrol prices and who also backed the successful
campaign for Chancellor George Osborne to scrap a planned 3p fuel duty
rise which was set to hit next month, said the Bank of England needs to
investigate potential manipulation ‘urgently’.